The role of interchange fees in two-sided markets: An empirical investigation on payment cards
Research output: Contribution to journal › Article › peer-review
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We study the impact of reductions in interchange fees on payment card services. We find that
consumer and merchant acceptance and transaction volumes increased when interchange fees
were reduced. Our results suggest that a 10 percent reduction in the rate of decline per quarter in
the average interchange fee by an acquirer resulted in a rate of increase in merchant acceptance
per quarter of up to 1.4 percent. Additionally, a 10 percent increase in the rate of interaction of
merchant acceptance and the total number of cards increased the rate of quarterly issuer
transaction volumes up to 1.7 percent.
| Original language | English |
|---|---|
| Pages (from-to) | 367-381 |
| Journal | Review of Economics and Statistics |
| Volume | 98 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 21 Apr 2016 |
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